What is an NFT? A simple explanation that really makes sense

Let me guess: you have been trying your hardest to ignore the subject of NFTs, but you have reached a point where conversations about them seem impossible to avoid and you want to keep up.

I can sympathize. A few weeks ago, I finally thought: Ok i will bite. What are NFTs, and why the hell are people paying so much money for them? But whenever someone tried to explain them to me, they usually started with “Basically …” and then said something that could be in another language. The online explainers were just as bad, so I decided to solve the problem on my own and find out for myself by gathering the conversations I had with a handful of experts.

To be clear: I still have no idea what I’m talking about. There are much more complete and accurate explainers out there, if you’re truth interested. But if you are looking for one that uses Phantom Thread analogies and don’t take yourself too seriously, so you’re in the right place. My hope is that, after reading this, you can meet someone with confidence halfway. But no more.

NFT stands for ‘non-fungible token’.

I know, ‘fungible’ is a word that sounds ridiculous. Basically, it means ‘interchangeable’. As if we changed quarters, we would both still have 25 cents. ONE not-fungible The token is unique and cannot be traded individually. Think of it as the haute couture of the coin; each NFT is unique to its owner.

Unlike haute couture dresses, NFTs do not exist in the physical world. They are strictly digital assets composed of unique lines of code that are stored in something called a “blockchain”, which is like an immutable digital ledger or, to use real life terms, a receipt written in stone. You need cryptocurrency to buy one, specifically Ethereum.

Market. But stay with me, because I won’t even try to explain what blockchain is or how it works. And I promise not to use the word “Ethereum” again.

Okay, since we already use haute couture as a metaphor, let me try to use the plot of Phantom Thread as a reference point, just for fun. (If you haven’t watched it yet, get out of this window and do it before reading on.) Remember when Reynolds Woodcock designs a custom wedding dress for the Princess of Everything? This dress is unique. This is non-fungible. Even if someone made an exact copy of it, only the princess would have the original, which she “never cursed” sewn into her stitching – in fact, Woodcock’s signature.

Now. imagine that Phantom Thread takes place in the year 2021. To keep up with the times, the House of Woodcock is selling digital renderings of a dress. Nice. The only problem is that they cannot call this type of couture work. Because? Because digital assets are fungible. If Woodcock saved the completed project on his desktop – let’s call the file WeddingDress.jpg – it could be copied a million times and sent to a million different people, and everyone would have the same thing.

This is where NFTs come in. Luckily, there’s a princess out there who loves Woodcock’s work, thinks it’s fucking chic and wants to have an image of him. It is rich in cryptocurrencies, but it will only pay for a JPEG file if it is able to say with absolute certainty that she alone owns the original, no one else. So, instead of buying WeddingDress.jpg, she buys an NFT from the file, which Cyril put up for auction in a digital NFT market like this, under the username Oldsoandso.

Without going too far into technology, what the princess bought is not the file itself. What she bought, instead, is basically a digital certificate of authenticity that says, in code: “Oldsoandso transferred ownership of this file to me on that date for that amount.” That one receipt, which was “coined” on the blockchain, where it cannot be deleted, duplicated or altered, is the non-fungible haute couture token and something of value. It is as if Woodcock wrote “never cursed” in computer language and sewed on the dress image.

Exactly! It means having proof that you have the “original” or “real” version of a digital asset. And that digital asset can be anything: a tweet, a GIF of a flying cat, a prominent NBA video, even a photo from this same article. ONE Times The writer recently auctioned off a photo of his NFT article for $ 560,000.

To use another film reference, it is as in A walk to remember, when that guy buys a star for Mandy Moore. What he actually bought was a piece of paper that gave him the right to name the star, not the star itself. No one can really “own” a star, any more than anyone can actually “own” a tweet. We can all go online or look at the night sky and see for ourselves. This piece of paper, however, works like an NFT.

Yes. Verifying a work of art as original has always been important for the art market. There has never been a way to do this with digital art before, so here we are.

Things have increased rapidly, in part because the market for original works of art is so well established. In March, an NFT from a collage by the digital artist known as Beeple was sold for $ 69 million at Christie’s, placing him “among the three most valuable living artists,” according to the auction house. The list goes on: David Hockney, Jeff Koons and then … Beeple.

For the same reasons, people pay a lot of money for rare baseball cards, unpolished jewelry and, of course, haute couture dresses. Maybe they genuinely love the thing and want to support the person who created it. (Bret Easton Ellis?) Maybe they think it is a good investment. Maybe they have a lot of money and find it funny. Or maybe they just want the bragging rights. Either way, humans just like to own things, even if they are not material.

There is also a certain aura about an original – something that works of art undoubtedly lost in the Age of Mechanical Reproduction. “Now that there is a way to link originality to digital objects, the question is: does the original coined have more aura than a copy of the digital file or a screenshot of it?” asked Lauren Studebaker, a researcher and art writer on the Internet. “In terms of ownership, it’s an ideological thing,” she said.

Personally, I would like to own an NFT from this extremely strange Vine that Times fashion critic Vanessa Friedman took the Olsen twins in 2014.

If you are an artist or creator, there are some benefits to NFTs. “The concept of ownership (and therefore materiality) that an NFT provides an object could further legitimize art made using digital media for the general public as being equal to, say, paintings,” said Studebaker.

Creators can also write clauses on their NFTs. Beeple, for example, stipulated that he would earn 10 percent royalties on each subsequent resale of his $ 69 million piece. “It is a problem in the art world, where a young artist sells his work at an undervalued rate because he has to survive and, in a year or two, the buyer resells it with a huge profit,” explained Studebaker.

She also added that when it comes to music, artists can start minting songs like NFTs, allowing them to set the price for subsequent broadcasts, which currently do not make as much profit as buying a CD or song on iTunes. They could also sell original recordings, buy tickets to shows like NFTs to avoid scalping etc. There are a million different ways that artists can benefit from NFTs, from musicians to meme makers.

Great! Discussing NFTs is the easy part. In my experience, simply saying these three letters in a row can be enough to upset someone, specifically a very serious person who knows what Ethereum means. (God help me after these Phantom Thread analogies.) But, in spite of all the jargon and bullshit around NFTs, the subject can really bring up some interesting questions.

For example, a friend of mine recently sold a digital smiley face NFT that he did, but was banned from an invite-only platform when he tried to sell a photo of his foot. This is a great food for intellectual debate: does one qualify as “art” more than the other? Who can say? What if it was a really good foot ??

Another thing that people like to discuss is where this is going. Is it just a bubble? A fad? Or are we going to talk about NFTs for the REST OF OUR LIVES ??? The current hype is likely to subside, but there is a world in which NFTs can be a common and tedious thing. Nobody knows the answer.

Wow, thank you so much for asking! Let’s chat offline.